Industry

Financial Services

Company Type

Multi-strategy Global Macro Fund

Location

Carmel, CA

Size

$500  Million

Investment Type

Equity
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Helping Great Companies Grow

Executive Summary

  • GRC harnesses decades of GP’s experience in macroeconomic investing in pursuit of two objectives:
    • Consistently achieve upper quartile returns and multiples of paid in capital, vintage year after vintage year  
    • Harvesting returns while mitigating risks faced by investors’ existing private equity or private credit investment
  • GRC captures returns from economically-driven changes in valuation among assets and between asset classes across the global economy
    • At times, the source of returns may overlap positive conditions for buyout, growth, credit, and venture funds
    • At other times, the returns may derive precisely from economic challenges that place those fund returns at significant risk
  • GRC seeks to deliver meaningful diversification over a vintage year fund cycle to private asset funds
    • Most traditional private investments target undervalued assets and employ operational skill and leverage to increase their ROI
    • These funds share many common risks, not the least of which are pro cyclical market and economic risks which have traditionally been difficult to avoid or mitigate within such a portfolio
    • Welton Global Risk Capture is designed to precisely address this private asset portfolio construction challenge
  • GRC utilizes the investment process of Welton Global, which has a 17-year track record. (1)
    • Net IRRs ranging from 15% – 100%+
    • Net TVPIs ranging from 1.7x – 3.6x for all vintages greater than 1 year
Helping Great Companies Grow

The Challenges We See

  • Most investment strategies, whether public or private, have a strong correlation to pro cyclical economic outcomes
    • These strategies tend to suffer during periods of economic contraction and valuation repricing
  • In response, investors seek out strategies uncorrelated to this set of risks
    • Many alternative strategies developed over the past three decades have sought to offer such portfolio diversification
    • That said, few have successfully delivered the desirable diversification attributes while also generating competitive positive returns through economic cycles
  • Private asset portfolios have few options for strategies that diversify their pro cyclical risk over their vintage year holding
    • GRC offers a strategy which is complementary to a portfolio of private asset holdings while also achieving returns, whether measured by IRR or multiples on invested capital, comparable to the best-in-class private asset funds would offer compelling value to such portfolios
Helping Great Companies Grow

The Strategy We Employ

  • The investment team at Welton for the past 17 years has run a successful multi-asset class macro investment strategy, Welton Global, which has many of the attributes that those seeking portfolio diversification want:
    • Positive absolute returns through economic cycles,
    • Zero or negative correlations to equity indexes and credit spreads, and
    • The ability to generate meaningful returns during periods of economic contraction
  • Welton Global invests in a diversified portfolio of approximately 100 long and short futures and forward positions across currencies, commodities, interest rates, and equities
    • Such a portfolio requires an initial margin deposit to support the futures and forward positions and a cash buffer to meet variation margin should the value of that portfolio experience a marked-to-market decline
    • The average initial margin deposit is below 20% of the Fund’s committed capital value
  • To address the critical need for diversification in private asset portfolios, Welton is offering a new way of accessing this strategy
    • By structuring the engagement with our LPs into a capital call private fund, rather than a hedge fund, Welton is able pass the benefit of the strategy’s capital efficiency to LPs to improve their potential return experience and better employ their uncommitted capital throughout their other holdings
Helping Great Companies Grow

Management

Dr. Patrick Welton

(IC, CIO)

An active investor for more than three decades and an investment manager since 1989, Patrick co-founded Welton in 1988. As CIO, he oversees the investment team, develops and executes on investment strategies, and monitors compliance and risk associated with those activities. He also continues to support the company’s research efforts. Patrick has served on committees for the Managed Funds Association (MFA) and as a member of the Board of Directors of the National Futures Association (NFA). He speaks at numerous conferences globally every year, participates in panel presentations, and has authored numerous articles on alternative investments, macroeconomic impacts on markets, and investment theory. He’s the former Chair of the Board of Montage Health and its subsidiaries, the former Vice-Chair of the Panetta Institute of Public Policy and a member of their investment committees. In the late 1990s, he co-founded Axios Data Analysis, one of the first large-scale data analytics firms focused on healthcare. His research experience also includes molecular biological work in gene sequencing and biophysics with a focus on positron emission neurofunctional brain imaging, and oncology through clinical cancer trials during a nearly 20-year period as Clinical Professor at Stanford University Hospital. Patrick holds undergraduate, doctoral, and postdoctoral degrees from the University of Wisconsin, UCLA, and Stanford University, respectively. He additionally holds a certificate on Corporate Board Effectiveness from Harvard Business School 

Guillaume Detrait

(IC, CRO)

 

Guillaume oversees Welton’s operations and enterprise risk management, ensuring that all systems, resources, and people are in place to achieve the company’s goals. He gained his general management experience over 25 years working at large and small financial services companies in various countries, including France, the U.S., and the U.K. Before joining Welton in 2008, he was a Vice President at HSBC and a Senior Business Manager at Capital One. He began his career as an audit manager for KPMG’s Paris and Los Angeles offices. Guillaume holds an MBA from Columbia Business School and a BS from NEOMA Business School (France) 

Helping Great Companies Grow
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CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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